UK Prime Minister Boris Johnson.
  • The pound sank on Tuesday after Prime Minister Boris Johnson moved to change the law on Brexit, making it illegal for Britain to continue negotiations with the EU after 2020.
  • The pound fell 1% against the dollar and 1.1% against the euro at 8:30 a.m, chipping away at the currency's post-election surge last week.
  • "This sets up another cliff-edge and could create yet more months of uncertainty for investors just when we thought all was squared away," one analyst said.
  • For more stories go to www.BusinessInsider.co.za

The pound sank on Monday morning after Boris Johnson put forward a law that would raise the risk of Britain crashing out of the EU by the end of 2020 without a deal.

The pound fell 1% against the dollar and 1.1% against the euro at 8:30 a.m in London, chipping away at last week's 1.5% rally when traders cheered Johnson's decisive Conservative party election victory.

The Prime Minister on Tuesday moved to change the law on Brexit, making it illegal for Britain to continue negotiations with the EU after 2020.

This comes despite warnings from the EU's chief Brexit negotiator Michel Barnier that making a "comprehensive" free-trade deal would be near impossible by the end of 2020.

Johnson's move "means no possible way to extend the transition period," said Neil Wilson, chief markets analyst at Markets.com. "I must confess to believing he wouldn't need to be so drastic, that a large majority offered the flexibility yet strength a government craves in deal-making."

"This sets up another cliff-edge and could create yet more months of uncertainty for investors just when we thought all was squared away," he added.

For more on Johnson's plan, which is due to be put forward to the UK Parliament on Friday, click here.

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